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Every single vote will matter when the European Parliament is giving its final consent on increased zero-tariff import from Ukraine.

Zero-Tariff import aimed at supporting the struggling economy of Ukraine

The European Commission proposes the EU to help Ukraine’s economy by extending by 50% to 100% the export quotas on certain agricultural and industrial goods for the next three years. The EU would open up its market for zero-tariff quotas in addition to the preferential tariff-rate quotas set out in the Association Agreement, and the partial or full removal of import duties on several industrial products. The EU is expecting this to improve conditions for increased production and job creation in Ukraine. The draft regulation is currently going for reflections in the European Parliament which is expected to vote on it on 31 May before final agreement of the EU member states.

Not everyone in favour

However, not everyone is happy with the idea, mostly because members of European Parliament worry that possible negative effects on the EU producers and markets have not beeen taken into account. MEPs are requesting a stronger safeguard mechanism that could protect EU producers and traders, as well as the exclusion of some cereals from the concessions.

The Committee on Agriculture (AGRI) signaled first that there will be a serious battle to get through with this proposal.

In their opinion on the draft the deputies from AGRI call for more cautious approach and for significant limitations of the Commission’s proposal.

Despite the political and economic difficulties currently experienced by Ukraine we cannot offer Kyiv new significant trade concessions when our farmers are still struggling with a deep agricultural crisis. The EU has been doing utmost to help Ukraine get its economy back on its feet and we will continue to provide help. But right now, our farmers would not endure a larger extent of trade liberalisation, particularly of sensitive farm products,” says MEP Czesław Adam Siekierski.

The Polish MEP is the Chairman of AGRI and is responsible for this particular legislative dossier in the Committee.

According to Siekierski’s report, adopted with 19 to 9 votes and 16 abstentions by AGRI, some farm products should be excluded from the proposal, while other imports should be limited. The AGRI Committee asks for wheat, maze and tomatoes quotas not to be extended, and those for barley – reduced six times in comparison to the original proposal.

The Committee also calls for a crisis mechanism through which the European Commission could react quickly in case the EU market is adversely effected, for instance by swiftly re-establishing the common customs tariffs, and to compensate EU farmers accordingly.

Things are going even further in the International Trade Committee (INTA), whose opinion will be crucial for the final vote of the Parliament.

INTA’s members tabled amendments that would lead to deleting 98% of the extra quotas proposed for Ukrainian agricultural products and some fertilisers included in the proposed draft regulation.

If this is voted, the regulation will become only an empty shell”, a Commission’s official admitted.

Others members are suggesting to increase import further, so Ukraine feels that it has the EU by its side, but on certain conditions.

Support, but no blank cheques

Ukraine is deserving support and we have a good opportunity to provide this. But the support could not be a blank cheque. Absolutely not”, Marita Ulvskog, a Swedish deputy from the Socialist group said. She added the assistance should be attached to requirements for reforms and “more visible results in the fight against corruption”.

The safeguard mechanism seems to be the most problematic part of the draft regulation. To calm down the worries the European Commission is now committing to add a safeguard clause for protection of the EU farmers. This mechanism could be triggered by a single member state or EU producer association.

The Commission assured it already monitors the implementation of quotas and the food prices, which is required by members of both AGRI and INTA committees. The EU executive arm promised deputies it will accept their requirement to report every year on the fulfilment of the additional quotas, but refused to identify all exporters who would benefit from the EU trade concessions due confidentiality issues.

I do understand the great difficulty Ukraine is facing now, trying to fight external enemy and introducing very complex reforms at the same time. I know the embargo and the transit ban has severely affected the trading possibilities for the country. So, we have to keep in mind in our work as well”, INTA’s rapporteur Jarosław Walesa says.

INTA will vote on the temporary trade concessions for Ukraine on May 4.